Opinion Contributor

Gang of 8 plan may hamper start-ups

Reform is a chance for the U.S. to invest in innovation, the author writes. | AP Photo

By JOHN O’FARRELL | 5/17/13 5:05 AM EDT

Great engineering talent is the life-blood of the innovation economy. Start-ups across the nation, from New York to Silicon Valley, are in an all-out war for the workers they need for their ideas to thrive. Over the next decade, we believe there will be one million more technical jobs than the domestic workforce can fill. Comprehensive immigration reform is an opportunity for our nation to invest in her innovation engine.

Current immigration policy already stacks the deck against small, innovative companies who don’t have the resources and hiring flexibility of corporate behemoths or offshore out-sourcers. Today’s paper-choked H1-B system only accepts visa applications once a year in April, and, if you are lucky enough to win one, finally lets you hire the candidate six months later. (If you aren’t, tough luck. Wait a year to restart the process, pushing out the earliest start date 18 months.) That level of inflexibility and delay is simply not an option for start-ups, for whom every hire is mission-critical and every day counts. Perhaps as a result, less than two percent of H1-B visas currently go to employees of young venture capital-backed technology companies.

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Unfortunately, the Senate’s current reform proposals would create new hurdles for start-ups without addressing the fundamental process flaws in the current system. Although increasing the number of H1-Bs is a step in the right direction, the new accompanying red tape all but ensures that start-ups will be squeezed out entirely. Start-ups have to be lean and nimble to survive. Forcing them to prove they’ve exhausted domestic options before making a foreign hire, or limiting their subsequent ability to make staffing changes, will further hamper their ability to compete. So will requiring them to meet minimum salary levels set for large corporations, since start-up employees often happily accept lower salaries in return for equity upside.